Korea's consumer spending jumps following easing of COVID restrictions
Updated: 2022-06-21 08:05:44 KST
It's the middle of a weekday afternoon but this train station in downtown Seoul is unusually crowded with people who had put off holiday plans earlier this year due to the coronavirus outbreak.
"The number of KORAIL users jumped 150-percent compared to early this year. It's so packed in Seoul Station that there's no room to even wiggle."
According to the Credit Finance Association, credit card transactions in the month of April have jumped 11-percent compared to the same period last year to more than 70-billion U.S. dollars.
In particular, transportation-related spending has spiked nearly 70-percent on-year to around 838-million dollars.
"Contactless payment systems are now increasingly becoming the norm apart from among senior citizens, contributing to a revitalization of consumer spending."
Disposable income has climbed nearly nine-percent per person compared to a year earlier but the Bank of Korea warns that consumer spending could deterioriate in the near future due to high inflation and high interest rates.
The BOK had warned the possibility of a "big step" rate hike of zero.five percentage-points later this year instead of its usual one-quarter of a percentage-point increments.
"Big rate hikes following inflation could ultimately curtail spending and net income."
The expert said the country's house mortgage loans could spike into the eight-percent range for the first time since the 2008 financial crisis from the current seven percent range making it more expensive for people to borrow money.
Kim Ji-yeon, Arirang News.